As a homeowner in the Chicagoland area, you are in an ideal position to take advantage of the benefits that come with solar panels. With federal and state incentives making the switch more accessible than ever, many Chicago homeowners are looking into installing solar panels on their roofs.
One of the biggest questions we find coming up for our clients at Green Tech Construction is not if they should install solar, but how. More specifically, how to purchase solar panels either through financing, paying in full cash, or with a leasing agreement.
We created a quick guide to help break down the financial and practical sides of both options. Our goal is to provide you with the knowledge to make the right decision for your home, family, and finances when looking to install solar panels in the Chicago area.
What Are Solar Panels and How Do They Work?
Before we compare the two financial options when purchasing solar panels, let’s ensure we have a basic understanding of how solar panels work. Solar panels are devices designed to absorb sunlight and convert it into usable electricity through a process called the photovoltaic (PV) effect.
When sunlight hits a solar panel, it knocks electrons loose on the surface from their atoms, generating a flow of electricity. This direct current (DC) electricity is then sent to an inverter, which changes it into alternating current (AC) electricity, which is the type of power used by your home’s appliances and the city grid.
In Chicago, the energy generated by your system during the day first powers your home. If your solar panels produce more electricity than you use, the excess power is often sent back to the utility grid.
Buying Solar Panels: The Benefits
Here are some of the key benefits we have seen Chicago homeowners may reap when choosing to purchase solar panels in full:
- Access to Financial Incentives and Tax Credits: A key benefit of buying is that you, as the system and homeowner, are eligible for all available financial incentives. This includes the substantial federal Investment Tax Credit (ITC), which currently allows you to deduct a percentage of the system’s cost from your federal income taxes. Similarly, the state of Illinois offers additional incentives, like the Solar Renewable Energy Credits (SRECs) through the Illinois Shines Program. However, it is important to note that not all clients who purchase solar panels are eligible to receive these tax credits. To determine your eligibility, visit the Illinois Shines webpage for more information.
- Maximum Long-Term ROI and Savings: When you own your solar panels, you are directly investing in a long-term asset. The energy you generate is free, meaning you may find your electric bill reduced. Over the 25-30 year lifespan of a solar panel, the energy savings alone typically outweigh the initial investment, resulting in more profit for you!
- Increased Home Value and Saleability: Numerous studies, including those by the National Renewable Energy Laboratory (NREL), have shown that homes with owned solar panels sell faster and at a higher premium than homes without solar. Since the panel system is fully paid for, it becomes a valuable asset for the next homeowner, increasing the appraisal value of your property in Chicago’s competitive real estate market.
- Approved Vendor List Perks: Owning a full solar panel system also gives you access to choose vendor-approved equipment from an approved vendor list, or AVL. This helps homeowners select panels that are top-quality while also being reliable products. Choosing from the AVL also ensures you are selecting solar panel equipment that is correctly optimized for your roof’s architecture and, of course, energy needs.
Buying Solar Panels: The Cons
While the financial perks of purchasing solar panels are strong, there are a few drawbacks to keep in mind, particularly for Chicago homeowners, which include:
- High Upfront Cost: For some homeowners, it may not be practical to buy out an entire solar panel system for their home due to the high cost and investment of these systems. Even with financing, homeowners must qualify for and commit to a significant loan, which may not be feasible for everyone. That’s why it is important to connect with Solar Panel companies for estimates to get a better idea of what a solar panel installation cost would be for your home.
- Responsibility for Maintenance and Repairs: As the system owner, you are responsible for all maintenance, repairs, and cleaning. While modern solar panels in Chicago are highly durable, issues can occasionally arise with inverters or wiring. While most quality systems come with long warranties, managing these issues falls entirely to the homeowner.
- Solar Panel Performance Risk: Although the system is an asset, the homeowner absorbs all the performance risk. If a shading issue develops (e.g., a neighbor’s tree grows unexpectedly) or if there are changes to local regulations that impact net metering, the homeowner’s financial returns may be reduced.
Leasing Solar Panels: The Benefits
For homeowners interested in solar panels, leasing can be a helpful option. A typical solar lease can look like signing a lease with a third-party for an outside company to install the solar panel system on your roof, but the third-party keeps or owns the solar panels for the duration of a contract, typically 20 to 25 years. Here are some other key benefits of leasing solar panels:
- Zero Upfront Cost: A key benefit of leasing solar panels is that it removes the initial cost hurdle that comes with buying a solar panel system in full. With leasing, the leasing company pays for the entire solar panel, from the equipment to the installation. This can help homeowners who may not be able to purchase the system in full, but still want to have the benefits that come with having solar panels on their home.
- Worry-Free Maintenance and Repair: Because the leasing company owns the entire solar panel system on your home, they are in charge of its maintenance and any repairs during the duration of the lease. This can offer both peace of mind for the homeowner and ensure that they will not have to pay for additional expenses that may come with their system.
- Predictable Monthly Payments: Leases typically involve a fixed monthly payment to the solar company, which is often lower than your previous average monthly electric bill. Most leases charge a fixed rate per kilowatt-hour (kWh) produced by the system, offering predictable pricing that is usually below the utility’s rate.
Leasing Solar Panels: The Cons
While a solar lease can seem appealing due to its low entry cost, it introduces several significant long-term financial disadvantages homeowners may not be aware of, which often include:
- No Access to Financial Incentives: This is the biggest trade-off: the leasing company, as the system owner, claims the federal ITC, SRECs, and any other local incentives. You receive the benefit of reduced utility bills, but you miss out on the hundreds of dollars in tax credits and thousands in SREC payments that system owners enjoy.
- Limited or No Increase in Home Value: Unlike an owned system, a leased system is viewed as a liability, not an asset, when selling a home. The new buyer must qualify and agree to assume the existing lease, which can complicate and delay the sale. If the buyer does not want to assume the lease, you may be required to buy out the remainder of the contract, even if you are moving out of the Chicago area.
- No Direct ROI: Because you are essentially renting the electricity-generating equipment, you are not building long-term equity. You pay the solar company a fee to reduce your utility bill, rather than investing that payment back into your own home equity.
Solar Panel Incentives to Know
While incentives can come when purchasing solar panels, there are some important details of both federal and state incentives to be aware of.
The Federal Tax Credit (ITC)
As it stands in 2025, the Federal Investment Tax Credit (ITC) allows you to claim a credit equal to 30% of your total system cost on your federal taxes. This credit has no income limits, and if you don’t owe enough in taxes to use it all in one year, you can carry the remaining credit forward to future years.
Critical Federal Incentive Updates for 2025
Recent legislation known as the One Big Beautiful Bill (OBBB) changed the rules for this tax credit. To qualify, your solar project must either begin construction before July 5, 2026, or be placed in service by December 31, 2027. This is a crucial window of opportunity, as projects that start construction in 2026 and later may face new, complex sourcing rules.
Illinois Shines Program
The Illinois Shines program lets you earn Renewable Energy Credits (RECs) for the clean energy your system produces. You can sell these credits to utility companies, which can provide an average of up to $7,000 in savings over 15 years. Some companies even offer a lump-sum payment of the future value of these credits, giving you a big chunk of money upfront to help pay for your system. However, clients must qualify to receive these credits, and not everyone is guaranteed these benefits.
PV Plus Storage
Another incentive that can come with the purchase of solar panels is pairing panels with PV plus storage. This type of battery pairs with panels by capturing energy during the day, to then utilize it after the sun goes down. The incentive falls under the Federal Tax Credit highlighted above.
Illinois Solar for All
Green Tech Construction is an approved solar panel vendor with Illinois Solar For All. This means we have additional incentives to offer to qualified households through this state program.
The Bottom Line
Ultimately, ownership of solar panel systems not only increases home value but can also allow homeowners to experience the benefits of state and federal incentives. While the upfront cost is higher, the ROI is most likely worth it.
Leasing is best suited for homeowners who cannot or will not finance the purchase and who prioritise immediate, zero-cost savings and maintenance-free operation over long-term financial gains.
At Green Tech Construction, we encourage our clients to own their solar system, whether through a loan or an upfront payment, as this puts you in full control. You can also keep those tax incentives while building up the value in your home over time.
Solar Panels and Solar Panel Installation with Green Tech Construction in Chicago
When looking for solar panel installation in Chicago, it is important to look for a contractor who not only understands Chicago’s weather but also the permitting process that comes with solar panel installation.
At Green Tech Construction, we are a 100% locally owned and operated company specializing in providing honest, high-quality solar solutions for our Chicagoland community.
They provide comprehensive services, including:
- Custom solar panel design tailored to your roof and usage.
- Handling all permitting and engineering.
- Expert solar panel installation by local, in-house, OSHA-certified crews.
- Installation of backup battery systems and EV chargers to complement your solar panels.
Ready to learn more about solar panel installation with Green Tech? Contact us today to receive your quote and get started on the solar panel journey with us!
Solar Panel Purchasing FAQ’s
Why is My Electric Bill High if I Have Solar Panels?
If you do have solar panels, but notice that your energy bill is still high, here are a few possible reasons:
- Fixed Charges: Utilities always charge a fixed monthly service fee to keep you connected to the grid, regardless of how much solar energy your system generates.
- Net Metering True-Up: In Illinois, your utility may send a larger bill at the end of the year if your system didn’t produce enough energy to cover your total annual consumption. This is called a “true-up” and means you have to pay for the net electricity you pulled from the grid over the year.
- Under-Sized System: If your original system was not sized correctly to match your home’s exact energy needs, you will still need to purchase a significant amount of electricity from the grid.
Do You Still Have to Pay Electricity Bills With Solar Panels?
Yes, in most cases, you still receive a bill. However, it looks very different. The main component you still pay is the mandatory monthly customer charge from your utility company.
During most of the year, your energy consumption (kWh) will be zero or negative (meaning you sent excess power back to the grid). If your solar panels are correctly sized, your primary bill may only be the fixed monthly service charge, often dropping the total monthly amount significantly compared to pre-solar bills.
Is It Worth Getting Solar Panels in Chicago Due to Chicago’s Weather?
While the common perception is that solar only works in perpetually sunny states, solar panels are highly efficient as they work off overall light exposure – not heat!
What is a Benefit of Pairing Solar Panels with PV Plus Battery Storage?
Beyond the main perk of an incentive that comes with pairing purchased solar panels with PV plus battery, is that it can take your home’s energy and power to the next level. Since this type of battery collects and stores energy during the day, you can trust it to provide your home with power during any unexpected outages from weather-related issues or blackouts.